Four suspects were arrested during the operation, an official said.
The Governor of the state, Seyi Makinde, ordered the closure of the facility on Saturday, according to a statement by his office.
Mr Makinde said the action was taken to prevent a recurrence of the Bodija explosion incident.
According to the governor, the illegal facility, located at Idi-Ayunre, was visited following a tip-off that it was being used to process illegally mined minerals.
Mr Makinde said those involved have been arrested and will be prosecuted.
The governor also disclosed that the state government is still trying to extradite the Malians indicted in the Bodija explosion, who according to him are on the run.
He added that the difficulty is due to Mali pulling out of ECOWAS, saying that diplomatic efforts will be deployed to ensure the culprits are brought to book.
On the Ido-Ayunre facility, the governor said the suspects have been arrested.
”I can report that those involved have been arrested and are in custody, and we are working to prosecute them. Our government has also taken over the facility pending the investigations and prosecution.
”We were able to apprehend the culprits because the government and citizens worked together in a timely manner to bust their operations.
”Please continue to support our efforts to rid our state of illegal activities. If you see something, say something and the authorities will do something. 615 is the toll-free number to call when you notice any security breaches,” Mr Makinde said.
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